By Ossom Rapheal
The Federal Government has directed the newly inaugurated board of the Bank of Industry to increase its current credit portfolio to the Micro, Small and Medium Enterprises sector.
The Minister of Industry, Trade and Investment, Mr Olusegun Aganga gave the directive while inaugurating the board of directors of the bank in Abuja.
Aganga noted that the current 15 per cent arrangement of the bank’s loanable funds being set aside for the development of the sector is no longer acceptable.
The minister said since the current 15 per cent was no longer acceptable, there is need for the board to carry out an upward review of the loanable funds which would enable the sector create more jobs and generate wealth.
He said, “The core mandate of the BoI is to provide financial assistance for the establishment of large, medium and small projects; as well as expansion, diversification and modernization of existing enterprises and rehabilitation of ailing industries.
“I would like to use this occasion to remind BoI that the future of MSMEs rest squarely on how responsive you are to their funding needs”.
“The current arrangement where less than 15 per cent loanable funds is being set aside for MSMEs need is unacceptable and must be reviewed upwards having regard to the potential of the sector to create jobs and generate wealth”.
The minister advised the board to adopt the practice in China and Indonesia where significant portion of loanable funds without collateral is extended to MSMEs.
He said of the amount given to MSMEs in these countries, about 97 per cent of such loans are repaid.
Aganga said the federal government would continue to give policy guidance to the bank towards achieving its mandate.
The minister also directed the newly inaugurated board to forward a quarterly progress report of the bank’s activities to the ministry, which must contain analysis of loan book by sector, impact of the bank on the Nigerian Industrial Revolution Plan, jobs created and contribution to national development; This should and must be done with every sense of duty to ensure striking a balance between the bank’s quest for higher dividends and its social obligation to the nation”.